Serbia is in its fifth year of negotiations to join the World Trade Organization, but according to State Secretary for International Economic Relations Vesna Arsić, this is not an unusual duration of the process, and Serbia is at an advanced stage.
Interview: Vesna Arsić, State Secretary for International Economic Relations, Ministry of Economy and Regional development
According to the latest announcements from the Ministry of Economy and Regional Development, Serbia could join the World Trade Organization (WTO) in 2011. Having in mind that similar predictions (accession by the end of the year) were heard in the last couple of years, is this estimation still realistic? What are the factors that influence the speed of the accession process and what are the major obstacles at present?
Looking at the progress made up to this moment, we strongly believe that this prediction is realistic. We are talking here about the closing of negotiations, and after the adoption of the accession package by the General Council of WTO we can start the ratification procedure in this country. By ratifying the accession package, Serbia will become a WTO member.
At this point we have had eight Working Parties meetings, and all major systemic issues have been resolved. It is very complex process, especially taking into account that Serbia is negotiating bilaterally with 12 parties (the USA, the EU, Canada, Japan, Switzerland, Norway, Korea, Brazil, Ecuador, El Salvador, Honduras and Ukraine). Although Serbia has made significant progress on the bilateral track, there are always factors that could influence the process; maintaining momentum in the domestic reform process is one of the most important elements, but support and readiness to compromise on the side of WTO members is important as well.
Apart from the fact that it is a precondition for Serbian accession to the European Union, what are the benefits that Serbia might gain from joining the WTO?
When deciding to enter into the process of accession, our major motive was to integrate into the international trading system by incorporating its rules and disciplines into the domestic system, thus making Serbia a reliable and predictable trading environment recognized by a majority of countries. Of course, we also took into consideration the effects of joining the WTO in the longer term, such as the growth of the GDP and employment rates (recent studies on the world level showed that all recently accepted WTO members registered positive trends in these indicators). Not less important are the benefits for consumers arising from more liberal and more competitive market conditions.
After more than five years of negotiations, what phase of application is Serbia in now?
Serbia is at a very advanced stage of negotiations. On the multilateral track, the Draft Report of the Working Party was achieved with a very limited scope of still open issues. Eight WP meetings have been held up until now, and the next meeting is scheduled for October 20. Bilateral negotiations have been held with even greater dynamics, not only back-to-back with the WP meetings but between these meetings as well. The negotiated issues in tariff reductions for industrial and agricultural goods and in the area of trade in services have been narrowed down. Some bilateral negotiations are already completed us, and we expect to close the majority of bilateral negotiations by the end of this year.
The burden of new requirements
Is five years of negotiations unusually long? What has been the average duration for other countries?
Serbia is approaching the average duration of the accession process. Namely, according to data of the WTO Secretariat, the average duration of this process has been 8 years and 6 months from the establishment of the WP and 6 years and 4 months from the submission of the Memorandum and start of negotiations. The most rapid conclusion was achieved by the Kirgiz Republic in less than 3 years, and the longest one took China more than 15 years. In these facts we can doubtlessly see the influence of the political will as well as effective coordination within the acceding country and the human capacities involved in the process. The good news is that Serbia has such capacities at its disposal.
Which bilateral partners are most demanding? Can Serbia fulfill their requirements? Within what period of time?
During the negotiations, we had an opportunity to notice that some requirements rose with each new acceding member, somehow creating “new standards” and going beyond the limits set in the previous processes. I would like to mention that such a practice is very burdensome for acceding countries, especially if, as in the case of Serbia, they are still vulnerable due to ongoing transitional reforms and recently, even more vulnerable due to the global economic crises. In the negotiations, Serbia would appreciate very much some understanding of these situations on the part of its partners. Despite the fact that Serbia has been trying to fulfill the majority of partner requests, in certain areas it is very important to commit to transitional periods which would last a maximum of 5 years after accession in a very limited range of situations.
Most of the legislative work is well advanced
What additional laws need to be passed for WTO accession and when can we expect their adoption?
A comprehensive legislative agenda has been on the table throughout the accession process. Serbia is at the very end of that road. Only a few pieces of legislation have to be passed or adapted. Among these, the most important are the Law on optical disks, the Law on Amendments to the Law on Foreign Exchange operations, the Law on Companies and amendments to the Law on genetically modified organisms (GMO). All these laws are in the drafting process, and there are expectations that they will be adopted by the end of this year.
Which areas were the most difficult to harmonize with WTO rules?
The answer to this question is partially answered in my previous response. Obviously the area of optical disks, for example, is new in Europe and we had to introduce a system that does not exist in any EU country, so we had to understand the concept and then adapt it to exiting legislation.
A lot of work has been also invested in new legislation on sanitary and phitosanitary issues where new laws were introduced, such as Food safety law, Veterinary Law and GMO law, all of which still need some adaptation to WTO rules.
Bosnia and Herzegovina and Montenegro are also in the queue to enter the WTO. What is the position of Serbia compared to that of these two countries?
Montenegro is very close to completing the negotiating process. The accession process of Bosnia and Herzegovina is advanced, but still lagging behind that of Serbia.
What is the scope of the present foreign trade of Serbia? What is the potential for foreign trade after joining the WTO? How do you see Serbia’s position from a trading perspective five years from now?
Serbia has recorded a constant growth of trade with the world, except in 2009 due to the economic crisis. In the first seven months of 2010, Serbian exports to the world increased by 19.6% in comparison with the same period in 2009, which is in accordance with the first signs of world market recovery.
After WTO accession, Serbia would have better access to the markets of 153 WTO Members through the MFN status and national treatment. These opportunities will influence export diversification and increase of export earnings, which would also have a positive impact on GDP growth.
|
Despite the fact that Serbia has been trying to fulfill the majority of requests of negotiation partners, in certain areas it is very important to commit to transitional periods which would last a maximum of 5 years after accession in a very limited range of situations.
|
CEFTA agreement role
The CEFTA agreement is not directly connected with the WTO. Nevertheless, the basic WTO principles are incorporated not only in the preamble of the CEFTA, but also in the main text of the agreement. Based on WTO rules, participation in CEFTA, which is a regional, multilateral agreement, is a useful exercise for participating in WTO, which is, of course, the broader multilateral framework.
